* July 2018 VOLUME 16, CHAPTER 3: “COLLECTION OF DEBTS ...

DoD 7000.14-R

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Financial Management Regulation

Volume 16, Chapter 3 * June 2020

VOLUME 16, CHAPTER 3: "COLLECTION OF DEBTS OWED BY INDIVIDUALS TO THE DEPARTMENT OF DEFENSE (DOD)"

SUMMARY OF MAJOR CHANGES All changes are denoted by blue font.

Substantive revisions are denoted by an asterisk (*) symbol preceding the section, paragraph, table, or figure that includes the revision.

Unless otherwise noted, chapters referenced are contained in this volume.

Hyperlinks are denoted by bold, italic, blue, and underlined font.

The previous version dated July 2018 is archived.

PARAGRAPH All

030101.B

030210

EXPLANATION OF CHANGE/REVISION

Updated hyperlinks and ensured compliance with administrative instructions. Added reference to Chapters 5 and 6 for debts owed by contractors, vendors, assignees, state and local governments, or foreign entities. Clarified that civilian payroll offices can submit debts to the Debt and Claims Management Office for offset from retired pay.

PURPOSE Revision Addition

Addition

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Financial Management Regulation

Volume 16, Chapter 3 * June 2020

Table of Contents

VOLUME 16, CHAPTER 3: "COLLECTION OF DEBTS OWED BY INDIVIDUALS TO THE DEPARTMENT OF DEFENSE (DOD)" ....................................................................................... 1

0301 GENERAL ..................................................................................................................... 5

030101. 030102. 030103.

Overview .............................................................................................................. 5 Purpose ................................................................................................................. 5 Authoritative Guidance ........................................................................................ 5

0302 COLLECTION OF DEBT FROM CURRENT, SEPARATING, TRANSFERRING, AND RETIRED DOD CIVILIAN EMPLOYEES...................................................................... 6

030201. 030202. 030203. 030204. 030205. 030206. 030207. Premiums 030208. 030209. 030210.

030211. 030212.

General ................................................................................................................. 6 Reasons for Overpayment of Civilian Pay and Allowances ................................ 6 Procedures for Debt Establishment ...................................................................... 6 Overview of Debt Collection from Current DoD Employees.............................. 7 Procedures for Routine Pay Adjustments ............................................................ 8 Processing Debt Repayments ............................................................................... 9 Collection of Indebtedness Due to Underdeduction of Health or Life Insurance ............................................................................................................................ 10 Collection of Indebtedness from Final Salary and Lump-Sum Payments ......... 11 Collection of Indebtedness from Transferring DoD Employees........................ 12 Collection of Indebtedness from Retirement Funds of Former Civilian Employees ............................................................................................................................ 13 Collection of Indebtedness from Former DoD Civilian Employees .................. 17 Collection of Debts Other than Overpayment of Pay and Allowances.............. 17

0303 COLLECTION OF DEBT FROM ACTIVE AND RESERVE MEMBERS .............. 19

030301. General ............................................................................................................... 19 030302. Due Process Requirements................................................................................. 20 030303. Collection From Member's Pay ......................................................................... 20 030304. Computation of Gross and Disposable Pay........................................................ 21 030305. Collections by Salary Offset Under 37 U.S.C. ? 1007(c) .................................. 21 030306. Collection by Salary Offset Under 5 U.S.C. ? 5514........................................... 23 030307. Indebtedness Incurred in National Guard or Reserve ........................................ 24 030308. Member Dies after Receiving Advance Salary Payment ................................... 24 030309. Centralized Processing of Involuntary Withholding of Member's Pay for Debts Owed to the Services' Exchange Commands ........................................................................ 24

0304 COLLECTION OF DEBT FROM MILITARY RETIREES AND SBP ANNUITANTS ...................................................................................................................................... 27

030401. 030402. 030403.

General ............................................................................................................... 27 Due Process Requirements................................................................................. 27 Routine Pay Adjustments Under 5 U.S.C. ? 5514 ............................................. 27

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Financial Management Regulation Table of Contents (Continued)

Volume 16, Chapter 3 * June 2020

030404. 030405. 030406. 030407. 030408.

Debt Collection .................................................................................................. 28 Debt Transfer on Retirement.............................................................................. 29 Debt Owed to Another Military Service ............................................................ 29 Priority of Deductions and Collections .............................................................. 29 Collection of Debt from SBP Annuitants........................................................... 30

0305 COLLECTION OF DEBT FROM FORMER EMPLOYEES, FORMER MEMBERS AND OTHER NON-DOD RELATED DEBTORS .................................................................. 31

030501. 030502. 030503. 030504. 030505. 030506. 030507.

General ............................................................................................................... 31 Reasons for Individual Out-of-Service Debts .................................................... 32 Obtaining Service from the DCMO ................................................................... 32 DCO Responsibilities......................................................................................... 32 DCMO Responsibilities ..................................................................................... 34 DFAS Departmental Accounting Offices .......................................................... 35 Collection Assistance for System-Generated Individual Out-of-Service Debts 35

0306 REFUNDING PREVIOUSLY COLLECTED DEBTS AND LATE PAYMENT CHARGES................................................................................................................................. 36

030601. 030602. 030603. 030604. 030605. 030606.

Scope .................................................................................................................. 36 General ............................................................................................................... 36 Payment Voucher for Refunds ........................................................................... 36 Refunds Available for Administrative Offset .................................................... 36 Determination of Refund Amount ..................................................................... 36 Funding the Payment of Collected Debt Refunds.............................................. 37

Figure 3-1. Sample Notification Prior to Referral of Debt to OPM ......................................... 38

Figure 3-2. Sample Debt Certification Statement .................................................................... 40

Figure 3-3. DDMS Debt Processing Steps ............................................................................... 41

Table 3-1. Military Member Indebtedness Due to Erroneous Payments, Government Accountability Office (GAO) Disallowances, and Notices of Exception ................................. 44

Table 3-2. Military Member Indebtedness Due to Loss of Public Funds................................. 46

Table 3-3. Military Indebtedness Due to Loss or Damage to Public Property or Supplies...... 47

Table 3-4. Military Member Indebtedness to the United States............................................... 48

Table 3-5. Military Member Indebtedness to Individuals, Government Instrumentalities, and Agents ........................................................................................................................................ 49

Table 3-6. Military Member Rates of Collection ..................................................................... 51

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Financial Management Regulation Table of Contents (Continued)

Volume 16, Chapter 3 * June 2020

Table 3-7. Military Retiree Indebtedness to Government Agencies ........................................ 53

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Financial Management Regulation CHAPTER 3

Volume 16, Chapter 3 * June 2020

COLLECTION OF DEBTS OWED BY INDIVIDUALS TO THE DEPARTMENT OF DEFENSE (DOD)

0301 GENERAL

030101.

Overview

A. This chapter pertains to the collection of debts owed to the DoD from current and retired DoD civilian employees, current members of the Military Services (active and reserve), military retirees, Survivor Benefit Plan (SBP) annuitants, and individuals who are no longer employed by DoD.

*

B. This chapter does not apply to collection of debts owed by contractors,

vendors, assignees, state and local governments, or foreign entities. Refer to Chapters 5 and 6.

This chapter does not apply to the collection of child support, alimony, or commercial debts from

the pay or salaries of DoD civilian employees or military members through garnishment or

involuntary allotment. This chapter does not apply to antitrust, fraud, tax, and interagency claims.

Refer to Volume 7A, Chapters 41 and 43; Volume 7B, Chapter 27; and Volume 8, Chapter 8 for

guidance pertaining to garnishments and involuntary allotments.

C. This chapter does not prescribe policy and requirements for determining whether a debt exists. Such determinations are the responsibility of the particular entitlement office or other organizations (e.g., military pay office, human resources office, or transportation office).

D. For purposes of this chapter, the civilian payroll office (PRO), military pay office, and military retiree pay office are examples of debt collection offices (DCOs).

030102.

Purpose

This chapter prescribes policy and requirements for the collection of debt owed to the DoD by individuals.

030103.

Authoritative Guidance

DoD is required to aggressively collect debts in accordance with the following statutes, as well as other statutes and regulations expressly identified in this volume:

A. Debt Collection Improvement Act of 1996 (Public Law 104-134, Chapter 10, section 31001);

B. Debt Collection Act of 1982 (Public Law 97-365);

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